I Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions.
Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions. IMM session am - pm New York. Industrial production Measures the total value of output produced by manufacturers, mines and utilities. This data tends to react quickly to the expansions and contractions of the business cycle and can act as a leading indicator of employment and personal income data.
Inflation An economic condition whereby prices for consumer goods rise, eroding purchasing power. Initial margin requirement The initial deposit of collateral required to enter into a position. Interbank rates The foreign exchange rates which large international banks quote to each other. Interest Adjustments in cash to reflect the effect of owing or receiving the notional amount of equity of a CFD position. Intervention Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates.
Introducing broker A person or corporate entity which introduces accounts to a broker in return for a fee. Short for initial public offering.
Market Capitalisation
ISM manufacturing index An index that assesses the state of the US manufacturing sector by surveying executives on expectations for future production, new orders, inventories, employment and deliveries. Values over 50 generally indicate an expansion, while values below 50 indicate contraction. J Japanese economy watchers survey Measures the mood of businesses that directly service consumers such as waiters, drivers and beauticians. Readings above 50 generally signal improvements in sentiment.
Japanese machine tool orders Measures the total value of new orders placed with machine tool manufacturers. Machine tool orders are a measure of the demand for companies that make machines, a leading indicator of future industrial production. Strong data generally signals that manufacturing is improving and that the economy is in an expansion phase.
K Keep the powder dry To limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the sidelines until a clear opportunity arises.
Key Currencies
Knock-ins Option strategy that requires the underlying product to trade at a certain price before a previously bought option becomes active. Knock-ins are used to reduce premium costs of the underlying option and can trigger hedging activities once an option is activated. Knock-outs Option that nullifies a previously bought option if the underlying product trades a certain level.
When a knock-out level is traded, the underlying option ceases to exist and any hedging may have to be unwound. L Last dealing day The last day you may trade a particular product. Last dealing time The last time you may trade a particular product. Leading indicators Statistics that are considered to predict future economic activity.
Leverage Also known as margin, this is the percentage or fractional increase you can trade from the amount of capital you have available. It allows traders to trade notional values far higher than the capital they have. For example, leverage of means you can trade a notional value times greater than the capital in your trading account. Liability Potential loss, debt or financial obligation. A limit order sets restrictions on the maximum price to be paid or the minimum price to be received. Liquid market A market which has sufficient numbers of buyers and sellers for the price to move in a smooth manner.
Liquidation The closing of an existing position through the execution of an offsetting transaction. London session — London. Long position A position that appreciates in value if market price increases. When the base currency in the pair is bought, the position is said to be long. This position is taken with the expectation that the market will rise.
Longs Traders who have bought a product. Lot A unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots. M Macro The longest-term trader who bases their trade decisions on fundamental analysis. Manufacturing production Measures the total output of the manufacturing aspect of the Industrial Production figures. This data only measures the 13 sub-sectors that relate directly to manufacturing.
Margin call A request from a broker or dealer for additional funds or other collateral on a position that has moved against the customer. Market maker A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial product. Market order An order to buy or sell at the current price. Market-to-market Process of re-evaluating all open positions in light of current market prices.
These new values then determine margin requirements. Maturity The date of settlement or expiry of a financial product. Medley report Refers to Medley Global Advisors, a market consultancy that maintains close contacts with central bank and government officials around the world. Their reports can frequently move the currency market as they purport to have inside information from policy makers.
The accuracy of the reports has fluctuated over time, but the market still pays attention to them in the short-run.
Forex Market
Models Synonymous with black box. Systems that automatically buy and sell based on technical analysis or other quantitative algorithms.
MoM Abbreviation for month-over-month, which is the change in a data series relative to the prior month's level. Momentum A series of technical studies e.
Foreign Exchange Rates/Currencies - Key Cross Rates - Currency Converter
Momentum players Traders who align themselves with an intra-day trend that attempts to grab pips. Net position The amount of currency bought or sold which has not yet been offset by opposite transactions. New York session am — pm New York time. No touch An option that pays a fixed amount to the holder if the market never touches the predetermined Barrier Level. The Offer price is also known as the Ask. The Ask represents the price at which a trader can buy the base currency, which is shown to the right in a currency pair. Offsetting transaction A trade that cancels or offsets some or all of the market risk of an open position.
On top Attempting to sell at the current market order price.
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One cancels the other order OCO A designation for two orders whereby if one part of the two orders is executed, then the other is automatically cancelled. One touch An option that pays a fixed amount to the holder if the market touches the predetermined Barrier Level. Open order An order that will be executed when a market moves to its designated price. Normally associated with good 'til cancelled orders.
Option A derivative which gives the right, but not the obligation, to buy or sell a product at a specific price before a specified date. Order An instruction to execute a trade. Order book A system used to show market depth of traders willing to buy and sell at prices beyond the best available.
Over the counter OTC Used to describe any transaction that is not conducted via an exchange. Overnight position A trade that remains open until the next business day. P Paid Refers to the offer side of the market dealing.
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Pair The forex quoting convention of matching one currency against the other. Paneled A very heavy round of selling. Parabolic A market that moves a great distance in a very short period of time, frequently moving in an accelerating fashion that resembles one half of a parabola. Parabolic moves can be either up or down. Partial fill When only part of an order has been executed.
Forex Market by Country
Patient Waiting for certain levels or news events to hit the market before entering a position. Pips The smallest unit of price for any foreign currency, pips refer to digits added to or subtracted from the fourth decimal place, i. Political risk Exposure to changes in governmental policy which may have an adverse effect on an investor's position. Portfolio A collection of investments owned by an entity. Position The net total holdings of a given product. Premium The amount by which the forward or futures price exceeds the spot price. Price transparency Describes quotes to which every market participant has equal access.